Werner Enterprises, Inc. · NASDAQ:WERN

Werner Enterprises — Deutsche Bank 10th Annual Global Industrials and Materials Summit 2019

21 slides from Werner Enterprises's conference presentation, Jun 5, 2019

  1. Slide 1: Deutsche Bank 10th Annual Global Industrials and Materials Summit

    Deutsche Bank 10th Annual Global Industrials and Materials Summit June 5, 2019

  2. Slide 2: Disclosure Statement

    DISCLOSURE STATEMENT This presentation may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and made pursuant to the safe harbor provisions of the Private Securities Lit

  3. Slide 3: Werner Overview

    WERNER OVERVIEW Premium Truckload Transportation & Logistics Services Provider 2018 Revenues by Segment Headquarters Omaha, NE 2% Truckload Transportation Services (TTS) 21% Market Cap1 $2.3B Werner Logistics Schools/Other 77% Dedicated 4,560 Fleet Size1 One-Way 2018 Revenues by Vertical 2018 Revenu

  4. Slide 4: Comprehensive, Customer Focused Solutions

    COMPREHENSIVE, CUSTOMER FOCUSED SOLUTIONS 3,385 Trucks 4,560 Trucks 40 Trucks  Dry Van  DC to store  Brokerage  Expedited replenishment  Freight Management  Cross Border  Engineered fleets  Intermodal  Temp Control  Private fleet conversion  Global  Specialty equipment  Final Mile 4

  5. Slide 5: Five T's Strategy Execution

    FIVE T’S STRATEGY EXECUTION 01 Tractors  Reduced tractor age to 1.8 years; maintain at or near this level going forward 02 Trailers  Reduced trailer age to 4.1 years, lowest level since the year 2000 03 Talent  Despite an extremely competitive driver market, reduced driver turnover to the second-

  6. Slide 6: Modern, Driver-Preferred Fleet

    MODERN, DRIVER-PREFERRED FLEET TRACTORS TRAILERS  New, modern, well-equipped, aerodynamic, driver-preferred  Newer, modern trailers; average age of 4.1 years fleet from top-quality OEMs  93% dry van, 6% temp controlled, 1% specialized  1.8 average age; industry average 5.8 years  Transitioning

  7. Slide 7: Our Driver Strategy Is Working in a Very Competitive Labor Market

    OUR DRIVER STRATEGY IS WORKING IN A VERY COMPETITIVE LABOR MARKET Werner Programs are Attracting and Retaining Talent Photo Caption: CEO Derek Leathers meets with drivers at April 2019 Driver Appreciation Event For 1Q19, 2nd Lowest 1Q Driver Turnover % in the Last 20 Years Advanced truck fleet with

  8. Slide 8: Werner Operational Excellence

    WERNER OPERATIONAL EXCELLENCE OUR BUSINESS MODEL ENABLES STRONG EXECUTION LT INDUSTRY QUALITY NETWORK EXECUTION SERVICE RELATIONSHIPS OPTIMIZATION TECHNOLOGY- PREDICTIVE FORWARD ANALYTICS Powered by Our People Case Studies Demonstrating the Strength of Our Business Model during 1Q19 Strong Execution

  9. Slide 9: 1Q 2019 Highlights

    1Q 2019 HIGHLIGHTS  Revenues increased 6% to $596M 1Q19  GAAP EPS increased 34% to $0.51 Financial  Adj. EPS increased 37% to $0.52 Highlights  Adj. operating income increased 40% to $49.2M  Adj. operating margin improved ~200 bps to 8.2%  Freight demand for our One-Way Truckload fleet was sea

  10. Slide 10: Truckload Transportation Services (TTS) Results

    TRUCKLOAD TRANSPORTATION SERVICES (TTS) RESULTS 1Q18 1Q19 Change YoY  TTS RPTPW1 +2.8%. One-Way TL RPTPW1 +2.8%, Revenues ($M) $431.6 $462.9 7% including 6.5% higher One-Way TL RPTM1 Adj. Op. Income ($M) $33.4 $44.1 32%  TTS RPTPW1 increases and operating margin expansion led to $10.7M Adj. operat

  11. Slide 11: TTS Fleet Metrics

    TTS 2 FLEET METRICS Dedicated Truckload Trucking Revenues1 ($M) Average Tractors Revenues / Tractor / Week1 $250 $218 4,530 4,019 $3,564 $3,694 $200 $186 $150 $100 $50 $‐ 1Q18 1Q19 1Q18 1Q19 1Q18 1Q19 One-Way Truckload Trucking Revenues1 ($M) Average Tractors Revenues / Tractor / Week1 $250 $4,016 $

  12. Slide 12: Werner Logistics Results

    WERNER LOGISTICS RESULTS 1Q18 1Q19 Change YoY Revenues ($M) $117.4 $117.4 0%  A good, but less robust freight market led to fewer project freight opportunities, lower spot rates and winter weather challenges, which kept revenues flat YOY Gross Margin 14.6% 17.3% 270 bps  Continued investments in l

  13. Slide 13: WERN TTS Adjusted Operating Margin

    WERN TTS(B) ADJUSTED OPERATING MARGIN(A) 11.5% 11.3% 9.0% 9.3% 9.0% 9.0% 8.7% 8.4% 7.9% 7.2% 7.0% 6.8% 5.9% 5.0% 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 (A) Above percentages include fuel (fuel surcharge revenues and fuel expense) (B) Truckload Transportation Services (

  14. Slide 14: ROE, ROA

    ROE 14.5% 13.6% 14.1% 13.7% 11.7% 12.4% 11.3% 11.1% 8.8% 8.1% 8.2% 9.0% 7.5% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017(1) 2018 ROA 8.4% 7.7% 8.0% 8.7% 6.9% 6.6% 6.5% 7.0% 5.4% 5.2% 4.6% 4.7% 5.3% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017(1) 2018 (1) Net income use

  15. Slide 15: Capex Moderating in 2019; Strong FCF Generation Forthcoming

    CAPEX MODERATING IN 2019; STRONG FCF GENERATION FORTHCOMING Net CapEx and Cash Flow Commentary  2019 Net CapEx expected to ($M) normalize in the range of $275M to $430 $300M; over the long term, targeting $418 Net CapEx at 11-13% of gross $370 2019 revenues $351 $349 Net CapEx: $310  Net CapEx exp

  16. Slide 16: Capital Allocation Strategy

    CAPITAL ALLOCATION STRATEGY  First priority remains continued investment in the business across cycles; operational Continue to and commercial excellence initiatives in place Invest in Growth  2019 Net CapEx spend lower than 2018 and more normalized  Fleet and terminal network improved; continuin

  17. Slide 17: Summary – Invest With Us

    SUMMARY – INVEST WITH US Focused effort over the Heavy capex period to Our new, Long-term margin and We are a stronger, past several years to transform our company technologically- return expectations better positioned balance the portfolio is behind us; we will advanced fleet, updated going forward

  18. Slide 18: Appendix

    WERNER WE KEEP AMERICA MOVINGe APPENDIX

  19. Slide 19: GAAP to Non-GAAP Reconciliation

    GAAP TO NON-GAAP RECONCILIATION (UNAUDITED) (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) Three Months Ended March 31, 2019 2018 Operating revenues $ 596,117 $ 562,684 Operating expenses 548,098 527,569 Adjusted for: Insurance and claims(1) (1,150 ) 0 Adjusted operating expenses 546,948 527,569 Adjusted

  20. Slide 20: Werner Well-Positioned for Potential Economic Outcomes

    WERNER WELL-POSITIONED FOR POTENTIAL ECONOMIC OUTCOMES Bullish case (domestic GDP growth > 2.5%, driver supply tight, freight demand solid)  Werner continues to provide outstanding customer service with new fleet, more experienced drivers, enhanced IT, strong operational execution  One-Way Trucklo

  21. Slide 21: We Keep America Moving

    WERNE WE KEEP AMERICA MOVING For more information visit Werner.com

Werner Enterprises — Deutsche Bank 10th Annual Global Industrials and Materials Summit 2019 on 6ix